The Court of Justice has handed down its first judgment defining the scope of the right of the Commission to intervene in proceedings pending before national courts where the coherent application of the antitrust rules so require.

In its judgment in Case C-429/07 Inspecteur van de Belastigdienst v. X BV, the Court held that the Commission could intervene in domestic proceedings concerning the tax deductibility of a fine that it had imposed on an undertaking in the Netherlands for its involvement in an illicit cartel.

The Commission had imposed fines on a number of companies for participating in the plasterboard cartel in a decision of November 27th 2002. One of the companies concerned, known as X KG of Germany, passed on part of the fine within the group of which it is the parent and in particular to its Dutch subsidiary, X BV. When making its corporation tax returns, X BV tried to deduct the amount of the fines from its profits. The Dutch tax authorities disallowed such a deduction. X BV disputed that disallowance before the Dutch courts.

The Commission then learned of the case and petitioned the Dutch court to intervene as amicus curiae pursuant to Article 15 § 3 of Regulation 1/2003. The Dutch court was unsure whether the Commission could use those powers to intervene in what was essentially a tax case, not an antitrust one, and referred the matter to the Court of Justice.

Coöperation between the Commission and national courts in antitrust matters is governed by Article 15 of Regulation 1/2003 which establishes a system for the mutual exchange of information between the Commission and the courts of the member States, and provides, in specific circumstances, for the possibility of intervention by the Commission and the competition authorities of the member States in proceedings pending before national courts.

The Court engaged in quite a bit of exegesis of Article 15 § 3. It stated that the first and second sentences of the first subparagraph of Article 15 § 3 permit national competition authorities to submit written observations on their own initiative, and, with the permission of the court concerned, oral observations to the national courts of their member State on issues relating to the application of Articles 81 EC or 82 EC. The third and fourth sentences of that provision also permit the Commission to submit written observations on its own initiative, and, with the permission of the court in question, oral observations to national courts where the coherent application of Articles 81 EC or 82 EC so requires.

Consequently, the Court held that the first subparagraph of Article 15 § 3 of Regulation 1/2003 refers to two different types of intervention with separate fields of application: intervention by the national competition authorities before the national courts of their member State on issues relating to the application of Articles 81 EC or 82 EC, and intervention by the Commission before national courts where the coherent application of Articles 81 EC or 82 EC so requires.

It held that the four sentences of that subparagraph, and above all the fact that the second and fourth sentences are almost entirely identical, emphasises the fact that the EC legislature intended to draw a distinction between those two situations, despite the fact that they appear in the same subparagraph.

Consequently, a literal interpretation of the first subparagraph of Article 15 § 3 of Regulation 1/2003 leads to the conclusion that the option for the Commission, acting on its own initiative, to submit written observations to courts of the member States is subject to the sole condition that the coherent application of Articles 81 EC or 82 EC so requires. That condition may be fulfilled even if the proceedings concerned do not pertain to issues relating to the application of Article 81 EC or Article 82 EC.

The Court went on to hold that the coherent application of the rules on competition comprises the penalties that are imposed upon their breach.

The EC establishes, according to the Court, a comprehensive system for monitoring cartels and abuses of dominant positions which sets out a principle of prohibition, contained in Articles 81 EC and 82 EC, and sanctions for its infringement, on the basis of Article 83 EC. Those articles must be understood as forming part of a comprehensive set of provisions designed to prohibit and punish anti‑competitive practices.

The Court found that it is apparent from Article 83 §2 (a) EC that the fines and periodic penalty payments which may be imposed on undertakings in connection with the application of Community competition law are designed to ‘ensure compliance with the prohibitions laid down in Article 81(1) [EC] and in Article 82 [EC]’. The purpose of Article 83 EC is therefore inter alia to ensure the effective supervision of cartels and abuses of dominant positions.

The effectiveness of the penalties imposed by the national or Community competition authorities on the basis of Article 83 §2 (a) EC is therefore a condition for the coherent application of Articles 81 EC and 82 EC.

The Court concluded that the third sentence of the first subparagraph of Article 15 § 3 of Regulation 1/2003 must be interpreted as meaning that it permits the Commission to submit on its own initiative written observations to a national court of a member State in proceedings relating to the deductibility from taxable profits of the amount of a fine or a part thereof imposed by the Commission for infringement of Articles 81 EC or 82 EC.